Multi-Voting Shares: Sweetener for Tech Start-Up IPOs?

On 1 December 2021, the Financial Services Authority (Otoritas Jasa Keuangan or OJK) issued the long-anticipated regulation governing the implementation of classes of multiple voting rights share (“MVS”) under OJK Regulation No. 22/POJK.04/2021 (“Regulation”).

As the title of the Regulation suggests, MVS can only be implemented by issuers deemed as having innovation and high growth rate, specifically technology start-ups that intend to do an initial public offering (“IPO”) in Indonesia. Usually, there are concerns among start-up founders when conducting an IPO because of the potential dilutive effect on the founder's ownership in the company, which in turn diminishes the founder’s ability to retain control of the company. By issuing the Regulation, the OJK signals to start-up founders that they can protect their vision after IPO. Concurrently, the Regulation also gives certainty to the public on who holds control over the company.

As we discuss in the Update, the Regulation sets out the requirements for the implementation of the MVS, obligations imposed on the MVS holders, and specific requirements for the MVS issuer in implementing corporate actions such as private placement and rights issue.

Committing to a Greener Future: Indonesia Embraces the Implementation of Carbon Economic Value

On 29 October 2021, shortly before the 2021 United Nations Climate Change Conference (COP 26), Indonesia issued Presidential Regulation No. 98 of 2021 on the Implementation of Carbon Economic Value to Achieve Nationally Determined Contribution Targets and Control over Greenhouse Gas Emissions in Relation to National Development (“Regulation”). The Regulation builds on Indonesia’s ratification of the Paris Agreement (via Law No. 16 of 2016), under which Indonesia expressed its hope to better manage the impact of climate change and stated its commitment to reduce greenhouse gas emissions and to achieve the nationally determined contribution (“NDC”).

The Regulation prescribes mitigation and adaptation actions as the two main methods to tackle climate change and to achieve the NDC. It also introduces the concept of “carbon economic value” (nilai ekonomi karbon) – it develops a regulatory framework on carbon pricing and carbon trading arrangements (including registration and valuation, economic incentives, and carbon levies and taxes) and signals Indonesia’s readiness to graduate from a voluntary carbon market into a compliance carbon market. As one would expect with such a substantial and wide-ranging piece of legislation, details on implementation will need to be fleshed out in future ministerial level regulations.